Sex.com Saga Continues, Cohen Says He’s Broke

Michael Hayes
SAN JOSE, Calif. — Stephen Cohen, better known to the adult entertainment industry as the man who hijacked Sex.com, told a federal court yesterday that he was flat broke and unable to pay the $65 million judgment to the domain’s original rightful owner, Gary Kremen.

In December, U.S. District Court Judge James Ware released Cohen from prison so he could gather his assets in preparation for surrendering them to Kremen, who originally registered Sex.com as part of his Online Classifieds Inc. portfolio.

After serving time for bankruptcy fraud in San Diego, Cohen used forged documents to dupe officials at Network Solutions into transferring the Sex.com domain to him. According to attorneys for Kremen, Cohen continued to profit from the hijacked domain until as late as November 2000, when a federal judge issued a preliminary injunction requiring Cohen to return the domain to Kremen.

Cohen, who represented himself at the most recent hearing, cried poverty, telling Ware that he was jobless, broke and unable to locate any of the assets accumulated from his time as the Sex.com hijacker.

“I have been unable to locate my personal property and it is my belief that all my personal property was either stolen or trashed by unknown persons,” Cohen wrote in a status report. “I own no stocks, bonds, securities, jewelry and I have no trusts, real estate and or insurance of any kind.”

Ware ordered the defendant to cooperate with Kremen’s attorneys, who plan to question Cohen further in the hopes of locating some of the assets.

“He has the money somewhere, I’m convinced of it,” Kremen attorney Tim Dillon told XBIZ. “We’re now in the position of going out and doing our own investigation to disprove what Stephen told the court. Whether he’s prosecuted for perjury is up to the California Attorney General.”

According to Dillon, Cohen’s attempts to hide assets have created a trail of money laundering around the globe.

“Some of the jurisdictions chosen by Stephen make it hard to get a civil judgment, but making the argument that his actions constituted money laundering should help us get the money in many of those countries,” Dillon said. “I think that’s where this case needs to go.”

Kremen told XBIZ he has no plans to quit his quest for the stolen money.

“Where did the money go?” Kremen said. “We’ll find out eventually. People who know me from the adult business know that I don’t give up.”

Cohen told Ware the case is far from over, prompting Ware to crack a joke in the courtroom.

“One of my desires since I became a judge is not to have this case until I retire,” Ware said.

Kremen said he feels sorry for Ware.

“The poor judge, he has to listen to all of this,” Kremen said. “He’s stuck with this case.”

Since leaving prison late last year, Cohen said he has been living with friends, an ex-wife and others. He has a mailing address in Utah and an attorney in that state as well, although he represented himself.

Kremen’s attorney Richard Idell said the only asset Cohen has surrendered is a San Diego house stripped of furniture and plumbing.

Pursuit of unlawfully gained assets aside, one value created by the saga is the evolution of Internet jurisprudence, Idell said.

In 2003, Judge Alex Kozinksi wrote on behalf of the 9th U.S. Circuit Court of Appeals that Internet domain names have the same rights and protections under the law as other intangible properties. Registering a domain name is no different than “staking a claim to a plot of land at the title office,” Kozinksi said.

“We always knew domain names have had value from a business standpoint because people have paid millions of dollars for them,” Idell said.

In January 2006, Boston-based Escom LLC paid a reported $14 million for Sex.com.